The online luxury shopping platform Balaan announced Monday that it has filed for corporate rehabilitation with the Seoul Bankruptcy Court.

Balaan CEO Choi Hyung-rok said the company proceeded with a move to attract investment in the first quarter of this year but that additional funding was delayed, leading to a short-term liquidity crunch.

He further explained that the company decided to apply for corporate rehabilitation to stabilize the settlement of commercial claims from its partners and vendors and to enhance the sustainability of its platform.

Choi added that alongside the rehabilitation process, the company will swiftly proceed with mergers and acquisitions and also plans to select a lead arranger within a week.

The announcement comes as Balaan has been embroiled in controversy over delays in settling sales payments, and since Friday both purchases and payments on the platform have been blocked.